Multiple Store Ownership

[rferna]

I'm looking to get into the industry and read on the CLA website that a coin operated laundry can be expanded from single to multiple store ownership. How does the business lend itself well to this type of expansion? What are the synergies? Any thoughts?

[PeterH]

Every store is different, whether you purchase existing stores or you build your own. Demographics change, city ordinances and zoning can change, different manufacuters with different models, different pool of people to hire as attendants, etc. On the other hand, you can sync up your advertising budgets and certain other systems to make your life easier when running multiple stores.

[millenniumplus]

We use the synergy of two stores as a sales pitch to commerical, business and college accounts. For example,
we are back-up to a nursing facility and hospital. If their machines breakdown and can't be repaired in a timely
manner we could handle a wide range of their demands with two stores. Although we are closed from 10PM
to 7AM we would re-open the stores and depending on (1) turnaround time and (2) the load sizes, we'd split
the stuff between the two stores - that hasn't happened yet. There were several requests of this type in 4Q03.
According to one client this was one of the selling points that got us that account. We have accounts with two
colleges and re-opened our two stores several times last summer to accomadate drumline competitions. Several
hundred visiting drumline college students, their parents and facalty drop by with a weeks worth of dirty clothes
on their last evening in town. Get them in and out in under three action packed hours. The Director of the local
college who coordianted the drumline competition was so happy with the results he recommended us to another
area college and that's how we got the second account. Another synergy that gets overlooked is when people
move they don't always move into another state, they move city to city and seek out your other store. Our two
stores are approximately 20 miles away.

[petefritz]

the business leads itself to this type of expansion becuase most people can't make enough owning just one store, so they need 2 or 3 to make it somewhere full time.

The only things i see owning more than 1 store is the snack spoilage is less because I can devide a case of Doritos over 2 snack vendors. There is no real synergies, that was tried a few years ago, it was found few, if any, exisited. PeteH is right, each mat has its' own charactor.

[actionmedia]

I see this post and mine are in top of the list and have about the same topic.
I don't know how is in the USA, but in my country I can tell you that peuples don't like to travel to much to do their laundry. If would be possible they would prefer that only have to cross the street or go next door for that (don't talk about those who have their own machines).
Considering that, I think would be best to have many small mat's than a big one.
If you have some marketing skills and you manage to create a local brand, you can even build a network of 10 to 20 mats. May be a franchise.
This is my theory. You can find it also in the post "2 sides of the coin!"

Teodor

[Laundry_Mike]

Other than what has been mentioned; combined advertising, and less snack waste, I have not found any other "economies of scale" that amount to much, that favors multiple store ownership. That is the reason that franchises have not flourished in this industry. There are no special ingredients, or secret formulas for a successful laundry business. (it's the location)

[petefritz]

I think the less snack waste is more important than advertise, becuase if you have the right LOCATION, advertise is just another expense. I know the CLA does not agree with this, they have the 5 star system for spending money on advertising now, but really, T. is right, people go to the closest mat to them that has the machines to fit thier needs.
Spend all you want on 5 star ads, it is a nice tax deduction. It only means you have a sub-par location.

[SecretarytoBraveDave]

People will travel past a mat to go to the one that does fit their need, Their needs being a variety of things from cleanliness to customer service, location, price and atmosphere amoungst a large list of more prerequisites. Advetising a superior mat could possibly attract laundry customers from other areas. I tracted the customers and there were many many customers that traveled past other mats. As I have heard many times, customer base changes.

[StoneColdKiller]

less snack waste...LOL

[Duane]

Snack waste? Any snack that doesn't get used at the store becomes freebies at home.....

[brucehwalker]

You can buy a lot of Funyons for what a second store costs.

[Laundry_Mike]

Hey, I bought a store once that owned it's own snack machine, and I can tell you - without multiple locations, you're going to have snack waste.

[StoneColdKiller]

Mike,
I handle all of my own vending and the only time in three years that I had waste was when I put a case of Doritos in my garage and apparently forgot about them. Some months later, my kids and I ate them, they seemed fine.

I only buy in cases, chips, candy, cookies, etc. Most counts are 30 - 60 per case and I dump it at one location fresh, at least I think. No one has ever complained.

[Laundry_Mike]

Congratulations, your machine must do some good volume to not have snack waste. So, if someone would have a location that did a good snack volume, with no snack waste, there would be no appreciable advantage to owning multiple stores, except the possiblity of joint advertising.

[actionmedia]

I read all replyes here with large interest because my intention is to build a network of laundromats.
I am a litle desapointed becouse all I see here is "snack waste", "advertising savings", other small and praticular things.
I run my own advertising company and I am not very pleased because I am still my own employee. I also work for a big publishing house as advertising salesman to get aditional income.
The main reason I see for owning multiple stores is the same I have a job and run my own business: TO MAKE MORE MONEY!
How each of us deal with each of our "money sources" depends of organising skills, location, peuples you know, financial resources, efficincy of each business, market trends, local customs.
Generaly speaking, the main isue is how many peuples you manage to serve.
To serve 10,000 peuples (considering that is your objective) you have at least 2 options:
1. Build single big laundormat for 10,000 peuples
2. Build 10 smaller laundromats wich serve 1000 peuples each.
The choice you make depends, first of all, of your market, than of your financial power and after that of the amount of work requiered, snack waste, advertising costs and so on. Of course if the market permits you you can make any other choice except those two. May be you can build 2 stores wich serve 5,000 each or 20 to serve 500 each.
As a conclusion the synergy of owning more than one store consists in the posibility of serving more peuples or households and that lead you to making more money.
Before I close up I have to remind you that we live in XXI century, that new techincs and technologies are available. Search and learn new ways to organise your work and to be able to run more than one store.

Teodor

[Laundry_Mike]

What people are saying is that there is no appreciable synergies generated by opening multiple laundromats - it's just another store. Yes, operators will own multiple locations to make more money, but there is no "compounding" effect on your income by owning multiple locations. To use your example; if you can serve 10,000 customers with one store, why would you consider building two stores to serve 5000 each. The key to making money is return on investment, and the key to making a good return on investment is the location. Do the math. The amount of laundromats in any given area are reflective of the local need for that type of business. Just because you build them, it doesn't generate a need for them, or mean that they will be successful.

[actionmedia]

Yes, that's it: "IF...". IF your objective is to serve 10.000 peoples and IF you find good location for that and IF you build that big mat that can serve 10.000 peoples than you do not need to build 2 mats to serve 5.000 each in the same area. It would be stupid.
BUT! IF the location you find can can serve only 5.000 peoples, one way to reach 10.000 peoples is to build another mat in other location that have 5.000 potential even in other city or state or country.
That is what I am talking about. When I say to build a mat to serve X number of peoples I am thinking only to the real potential of the market. I am not talking about number of machines, square feet or other such thing.
It is only a general theory. I belive you can adapt it to your particuar case.